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Lenders have launched the first in a new breed of interest-only mortgages for older borrowers.

In March the Financial Conduct Authority (FCA), the City watchdog, confirmed changes that would allow mortgage companies to offer interest-only loans with no fixed end point.

The technical change will mean those approaching the end of their loans who have no means to repay the debt won't be forced to sell their homes – providing they pass the necessary affordability checks.

Interest-only loans, which are far cheaper to service than repayment mortgages, became all but extinct in the years after the crisis.

As well as being cheaper than repayment loans, retirement mortgages could also help borrowers...